For UK GAAP purposes, receipts are broadly 'earned' in respect of goods when the significant risks and rewards relating to their ownership has been transferred, the amount of revenue can be measured reliably, it is probable that an economic benefit associated with transaction will flow to the entity selling the goods and the costs incurred in respect of the transaction can also be measured reliably1. For services, receipts are earned when the amount of revenue can be measured reliably, it is probable that economic benefit will flow to the entity, and the stage of completion and costs to complete the transaction can be measured reliably. The receipts should be measured at the fair value of the consideration received or receivable, taking account of any trade discounts2.
Accordingly, when sales are made in an accounting period, the sale price should normally be brought into account for tax purposes in that period even if the proceeds are not received until after the end of the period (subject to a possible
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